Japan's debt has reached an eye-watering ¥1.3438 quadrillion, putting its fiscal policies under pressure as government bond yields climb. Rising yields mean refinancing costs for banks, insurers, and the broader financial sector are increasing sharply. While a stronger yen may seem like a silver lining, it risks triggering a reversal of carry trades, forcing investors to offload foreign assets including bonds, stocks, and cryptocurrencies.
The country’s $1.143 trillion Treasury holdings connect this domestic turbulence with global markets, creating a ripple effect that could unsettle investors beyond Japan’s borders.
